1. Field of the Invention
The present invention relates generally to a direct billing address verification system, and specifically to an improved automated system and process for detecting and preventing fraud by a remote purchaser in an electronic transaction.
2. Description of Related Art
Electronic purchase transactions performed from a remote site and transmitted electronically over computer networks via the "Internet" or phone lines via audiotext systems have recently gained widespread use. In such electronic purchases, the purchaser either supplies credit card information to the vendor or the vendor directly bills the purchaser for the particular transaction. While certain safeguards preventing the fraudulent use of credit cards exist, such safeguards are not effective in preventing fraud by purchasers who are billed directly for their purchase. These purchasers may simply provide a false name and address to a vendor for billing purposes when making a purchase from the remote location, which leaves the vendor little recourse in recovering the amount of the purchase when a bill is sent to the false address. Further, purchasers sometimes move their residence in the interim between the time of their purchase transaction and when they are billed. This makes it difficult for vendors to locate the purchaser at their new address in order to obtain payment for the purchase transaction.
One possible security measure for preventing fraud in direct billing practices is to check the name and address of the purchaser against a telephone directory to confirm the purchaser's name and address correlate. However, an address verification system of this type is not entirely effective in preventing fraud on the vendor. Individuals usually carry personal identification in their wallets, such as the individual's driver's license. A thief who steals the individual's wallet will have access to the individual's personal identification, so that the thief will know the individual's address and will be able to satisfy a simple address verification test which utilizes telephone listings. Thus, current address verification systems have not been successful in entirely eliminating fraudulent direct billing transactions.
Another security measure developed to prevent fraudulent electronic purchase transactions is the use of automated number identification (ANI) blocking. Since almost all electronic transactions are performed from remote terminals connected through telephone lines, the vendor may automatically collect the telephone number associated with the telephone line of the remote device from the telephone carrier. The vendor possesses a stored list of telephone numbers associated with a pattern of fraudulent use, wherein the ANI collected is compared with the stored list to determine if a match exists. If the ANI collected is on the stored list, then that telephone line is blocked from further use. ANI blocking is effective in preventing continued fraudulent usage from a particular phone number. However, ANI blocking is also of limited usefulness, because it labels a telephone number used on one occasion for a fraudulent transaction as a blocked phone number. Even though the telephone number and purchaser's billing address may not be interrelated, the telephone number will be blocked from any further purchase transactions. The next purchase transaction attempted using that telephone number may be a valid transaction, but the transaction will be denied since the telephone number has been blocked by ANI blocking. Thus, remote terminals frequently having a plurality of different users, such as hotel room telephones or pay phones, will be blocked by ANI blocking by one fraudulent use, preventing subsequent valid purchase transactions from being performed from that remote terminal. While ANI blocking is effective in preventing repeated fraudulent purchase transactions from occurring from the same remote terminal, it also has the detrimental effect of preventing subsequent valid purchase transactions from being performed from the same remote terminal.
Clearly, there is a need for a method for a more efficient and secure method for preventing fraudulent purchase transactions from a remote site by purchasers billed directly by the vendor for their purchase.